MPP introduces bill to cut tobacco taxes

Haldimand-Norfolk MPP Toby Barrett has submitted a private member's bill before the Ontario legislature on its first day back from the summer break, which calls for a dramatic reduction in the tax on cigarettes and cigars to fight the contraband trade.
His bill, which passed first reading Monday and will be up for second reading on Sept. 24, would replace the current Ontario Tobacco Tax with a new one that lowers the rate by 33% to 8.23 cents per cigarette from 13 cents per cigarette, and to 37.7% on a cigar from the present 56.6%.
His bill also calls for the change to be done in conjunction with the federal government's tax policies.
"We must lower the taxes on those products legally to match the prices of the contraband trade, which carries on activities that allow cigarettes to be sold without paying proper taxes," Barrett said in a telephone interview after first reading.
"What I am proposing is to do what we did in 1994 when contraband got out of control due to taxes that were too high. The situation changed as soon as taxes were lowered to a more acceptable level."
Because the bill is one of the first out of the starting gate in the fall sitting and will be up for second reading in less than two weeks, Barrett acknowledged that MPPs in all parties know little about its purpose.
So he has prepared a sales job to lobby them on the necessity to use a change in tax policy to attack a contraband trade that now accounts for more than 50% of cigarettes on the street and robbed Ottawa and the provinces of an estimated $2.5 billion in 2008 alone.
Barrett will explain his bill before the Progressive Conservative caucus today.
His office has also prepared an package with background information on his bill to be distributed to every MPP in all three political parties.